By Robin Shofner • January 10, 2010•Firms and the Private Sector
UCLA recently hosted a debate between David Lat and Elie Mystal of Above the Law. The debate centered around associate compensation and promotion in large firms. Specifically, Mr. Lat supported the view that a merit-based system is the best way to compensate attorneys and Mr. Mystal argued that a lockstep system is optimal. Obviously, each system has its benefits and its drawbacks in relation to all associates but women and minorities may be especially affected by which manner of compensation is used at their firm.
When the debaters were asked how the method of compensation would affect diversity in large firms, they both seemed to agree that a merit-based system might adversely affect minorities, women, and gays and lesbians. The theory being that firms are still disproportionately run by older, white men and that those older, white men will be making decisions about which associates have performed well enough to be promoted. The more that these partners are empowered to make determinations about pay scale, the more minorities and women are likely to suffer.
While a merit-based system does provide partners with more leeway to either give or withhold pay raises, a lockstep system is not without its faults either. In a lockstep system, there is essentially only one promotion that matters: that to partner. The same older, white men that make determinations about merit-based raises in firms that employ that method of promotion will be making determinations about who is to be promoted to partner in firms that employ a lockstep system.
Ultimately, while both systems have their faults, it seems that a merit-based system may end up being disadvantageous for women and minorities and may eventually end up hurting diversity efforts as a result.